Put Families First, Banks Last
Illinois is going on six months without a state budget. This has proven disastrous for social service agencies and the families that need their services. Meanwhile, Illinois continues to pay big Wall Street banks on time and in full. We believe our money should be going to support families not bank profits.
In the first three months of the fiscal year, while service providers shut down, the state has made hundreds of millions of dollars in debt service payments. The Comptroller, the person in charge of paying the states bills, has claimed there isn’t enough money to pay for vital state programs like homeless services, childcare assistance, and anti-violence programs. Yet that didn’t stop her from cutting checks for hundreds of millions dollars to big banks including nearly $37 million to Bank of America for fees and rip-off deals tied to bond debt.
- $10.7 million in fees and toxic swap payments on General Obligation bonds
- $20.8 million in fees and toxic swap payments on Tollway Authority bonds
- $1.0 million in underwriters’ fees on new Tollway Authority bonds
- $325k in toxic swap payments on Housing Development Authority bonds.
Beginning July 1st the state slashed eligibility for the Child Care Assistance Program (CCAP), leaving tens of thousands of low-income children without access to affordable child care. The amount the state spent on fees and swap payments from July through September could have provided CCAP subsidies to more than 26,000 children.
For months, while checks went out the door to banks, the state didn’t pay for community providers, including:
- Safety net hospitals and community clinics
- Home care for seniors
- Early Intervention child development services
- Domestic violence services
While banks profit off of predatory finance deals, the state still isn’t paying for vital services our neighborhoods depend on, such as homeless services, domestic violence services, public health screenings, state services for veterans, and much of the state-administered home care for seniors
The Governor must tell the banks that the state has no legal basis for paying them and negotiate deferral of their payments – the banks shouldn’t profit while communities suffer.
Time to Get Our Money Back
Wall Street banks suckered the State of Illinois into risky financial deals that they said would us money. But instead of saving money the opposite happened. Since the financial crash, these financial deals have cost Illinois taxpayers more than half a billion dollars, while our state cuts vital services needed to keep our communities healthy and safe.
In other parts of the country these bad deals have been renegotiated but in Illinois politicians have refused to go after Wall Street banks. Instead Governor Rauner has chosen to cut from childcare, domestic violence, homeless shelters, and other vital services.